Saturday, March 14, 2009

Seven Avoidance Indicators

Guest perspective/Ralph NaderIndicators of avoidance are what come to mind while absorbing the various rescue, recovery, stimulus and guarantee programs coming out of the Obama Administration to slow and reverse a splintering and shattering economy. If the Obamites do not act now when the political time is ripest, to put into motion forces of deterrence and prevention, the casino capitalists of tomorrow will again be able to de-stabilize our economy.

The other day I saw Alan Greenspan, former chairman of the Federal Reserve, just about predicting another round of recklessness in about fifteen years. But he called it “human nature” not casino capitalism.

Here are seven avoidance indicators which outline what Washington is not doing to prevent another round of greed and misdeeds by the Wall Street few against the innocent many throughout the country.

1. Where are the resources for comprehensive law enforcement against the Wall Street crooks, swindlers and purveyors of costly deceptive practices? Isn’t there a need to add two to three hundred million dollars for more FBI agents, prosecutors and corporate crime attorneys under the Justice Department to obtain the fines and disgorgements which will far exceed in dollars what is spent by the forces of law and order?

Americans want justice. They want jailtime not bailtime for these crooks. Look how many of the swindled just turned out in a New York City winter to let Bernard Madoff have a piece of their mind as he entered the courtroom and immediate imprisonment.

There has been very little movement so far in Congress or the White House toward this necessary action.

2. Where are the anti-trusters to revive the moribund divisions in the Justice Department and Federal Trade Commision? Failed banks, brokerage firms, and now insurance companies are being taken over by shaky acquirers, often with the encouragement of the federal government. Other industries are experiencing similar mergers and acquisitions in an already over-concentrated economy.

Our government needs to be on top of this accelerating creation of more companies deemed to be “too big to fail.” A variety of antitrust policies are needed to prevent, restructure or, at least, require spinoffs to minimize the anti-competitive effects of the “urge to merge.”

3. What about Congress and Obama shifting some power to the investors and shareholders who are paying for all these losses? The corporate bosses have made sure for many years that shareholders, who own their companies, have little or no right to control them. Had there been less of a gap between ownership and control, the bosses could never have engaged in such reckless speculation, looting and draining of the trillions of dollars with which they were entrusted. These include mutual funds, pension funds and various trusts. Power to the owners seems to be off the table.

4. The federal officials are talking up stronger regulation and re-regulation proposals but we have not yet been informed of their specific plans. There is not much talk of regulatory prohibition. That is, flat-out prohibition of banks, insurance companies, and other fiduciary institutions from speculating in derivatives or, to be more specific, bets on debts and the even more hyped creations of bets on bets on debts on debts.

5. By now, Washington should be devising ways to pay for these gigantic deficits and bailouts. A fraction of one percent sales tax on the hundreds of trillions of dollars in derivative transactions annually would produce hundreds of billions of dollars in revenue and tamp down some of this Wall Street gambling with other peoples’ money.

Such a tax on speculative trades in these abstract instruments can make the Wall Streeters pay for their own bailouts and reduce some of the taxes on human labor.

6. Our government doesn’t highlight not-for-profit institutions like the 8000 credit unions that are increasing their loans and continue to serve over 80 million Americans without a single insolvency. One would think that with the financial goliaths in a free fall, despite ever-larger bailouts from the federal government, that the cooperative model of credit unions would become a useful teaching instrument.

In his new paperback book, "Agenda for a New Economy," David Korten makes an important distinction between the “phantom wealth” of Wall Street and the “real wealth” of Main Street.

His 12-point agenda raises the fundamental question of why Wall Street is needed and how the functions of a just and progressive economy can be fulfilled with a sensible transition to a “real wealth” economy engaged by and accountable to real people striving for the necessities and wants of life through environmentally friendly, more efficient institutions.

Lest any remaining doubters out there are thinking about our country returning to business as usual Wall Street style, please read the confidential powerpoint presentation “AIG: Is the Risk Systemic?” by the AIG financial giant grasping $180 billion, so far, in federal aid and guarantees

In 21 pages of very large type, you will see why the AIG bosses believe that failure of their gigantic corporation would only “trigger a cascading set of further failures which cannot be stopped except by extraordinary means.” In other words, AIG says to Uncle Sam and you the taxpayer save it or be prepared for a global collapse through a dominoes effect of unknown catastrophic sequences. For the full astonishing AIG text, see: http://www.aig.com/Related-Resources_385_136430.html. Right from the horse’s mouth!

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I'm Tony Schinella, an award-winning newspaper editor/journalist and radio broadcaster, currently living in Concord, N.H. This profile links to a number of my blogs including Politizine.com, the Taste the Floor radio program website, OurConcord.com, as well as media analysis and an analysis of the 2000 election. Opinions and comments are my own and not those of my employer. Feel free to participate. Email: politizine-at-yahoo.com. Copyright, 2002-2017, Tony Schinella

Winner, Media Award, from the Concord Grange #322 on April 30, 2012, for work with Concord NH Patch. It was the Grange's first ever media award. "No matter what it is, (Tony's) out covering it. He's honest ... he tells the truth and he doesn't fudge it, no matter what," Dick Patten, Concord Grange. View the video clip from the event by clicking here.

Winner, five New England Newspaper & Press Association awards for 2010 including third place award for General Excellence; second place award for Local Election Coverage; second and third place awards, in separate class divisions, for Educational Reporting; and second place for Overall Design, for work with the Belmont Citizen-Herald and WickedLocalBelmont.com.

"Tony Schinella is one of New England’s journalistic gems – a reporter’s reporter and sharp observer of anything that sparks his interest." - David Bernstein, political reporter, the Boston Phoenix

Finalist, Best of Gatehouse 2008 Newspaper of the Year [Non-daily], Belmont Citizen-Herald.

Winner, 2007 Appreciation Award from the Concord Pineconia Grange for work with non-profit groups and community service.

Winner, 2005 New Hampshire Association of Broadcasters Golden Mike Award in the Feature Story category for "Trains," an audio feature about the Hooksett Lions Club Model Train Event, for WKXL 1450 news radio.

On problems with talk radio, from a column published in The Winchester Star: "Schinella has written a worthwhile column on the demise of talk radio." - Dan Kennedy, The Boston Phoenix, Dec. 6, 2002.

On the lack of local talent in the Boston talk radio market: "[Schinella's] a bright, articulate guy, and he espouses a hard-edged political view that's seldom heard these days." - Dan Kennedy, The Boston Phoenix, "The Death of Talk Radio," May 8, 1997.